About fifteen years ago, an academic friend from France noticed the impact of Minitel on French consumer behavior. He noted that consumers were increasingly using the pathbreaking electronic directory created by France Telecom to drive, not respond to, elements of marketing strategy such as product development, advertising, and pricing. His presentation of his observations to his American counterparts was met with only a modest level of interest.
Fast forward fifteen years. Tens of thousands of "newsgroups" and discussion boards on the Internet have spawned millions of bloggers who speak in both whispers and shouts. Combined with the low cost of Web site and even crude advertising design, inhabitants of the Web can achieve wonders in creating and broadcasting a wide range of messages. These range from campaigns for or against public figures to ads highlighting the high cost of replacing iPod batteries (since corrected). The newsgroups, discussion boards, and blogs may contain the seeds of ideas and notions about cutting-edge behaviors suggestive of everything from future business opportunities to social and political trends.
Two new studies suggest the impact of this behavior on the nature of what may be going on in the minds of marketers. In one, Vijay Govindarajan and Praveen Kopalle conclude that established companies that have created a mechanism for paying attention to "emerging customers" are more likely to foster "disruptive technologies" (i.e., cellular telephony) as opposed to those technologies that are merely "radical" (i.e., cordless telephones—innovations that enhance and sustain, not disrupt, existing technologies and products).
A second study by Eric von Hippel concludes that manufacturers increasingly rely on users for new product development, design, and distribution. His particular interest is in how products can be designed and distributed to elicit user-driven development through such methods as "open sourcing" and interactive Web sites that effectively involve users in engineering. The result is a fuzzing of the boundaries between a company and some of the users of its products and services.
There is a kind of "always on" communication system shaping up between the most outspoken and committed of the tech-minded users and those that supply them. We might term it "consumer generated marketing." Is it time to ask ourselves whether these trends are always in our best interests as marketers and customers? Is it possible to be too well connected with one segment of customers? Is there a danger among marketers and more generally the media of paying too much attention to the Internet-savvy early adopters and activists and too little to other early adopters that tend to keep their behaviors and ideas to themselves? Might marketers be too sensitive to Internet prompts, responding too rapidly on the basis of noise as opposed to truly developing trends? What do you think?
Note: The term "consumer generated marketing" is derived from a term, "consumer-generated media," coined by Pete Blackshaw, chief marketing officer of Intelliseek, an Internet-based consumer feedback provider. In the interest of full disclosure, I am a director of Intelliseek.
To read more:
Vijay Govindarajan and Praveen Kopalle, "Can Incumbents Introduce Radical and Disruptive Innovations?" Marketing Science Institute Report No. 04-100, Winter 2004/2005
Eric von Hippel, Democratizing Innovation (MIT Press, 2005)
HBS Working Knowledge readers: For your response to be included, please respond by or before Thursday, May 19th. Thank you.